Ride-hailing company Ola has been rocked by allegations that one of its senior-most executives has been involved in corrupt practices, estimated to be running into millions of dollars, and has ordered an investigation into it.
The executive – Yugantar Saikia, Ola’s head of human resources and chief administrative officer – has had his work assets including laptop computer seized by the company and has been asked not to report for work.
Saikia is being investigated for allegedly favouring vendors in exchange for kickbacks, according to three sources. The seriousness of the development is evident from the fact that a ‘Big Four’ audit firm has been roped in to help with the investigation.
When contacted, Saikia told FactorDaily he had not been “notified” about any such action by the company. An Ola spokesperson declined comment.
Saikia had already quit the company and his last day was supposed to be end-March. But, earlier this week, he was abruptly asked to leave and his laptop computer was seized, one source said. Saikia was one of Ola co-founder Bhavish Aggarwal’s key executives at the company.
“An investigation is ongoing, the scope of the fraud goes beyond just recruitment – it includes procurement, administration and IT,” said a second source. A review and overhaul of processes are underway as part of the clean-up, this source said.
“The estimated value of this fraud looks to be in few million dollars,” the second source added.
Ola hired Saikia to head human resources in February 2015, two months before it announced a $400 million Series E round of funding led by Russian billionaire Yuri Milner’s investment fund DST Global and has been a mainstay since. The company has grown its fleet seven times to 700,000 vehicles – including auto rickshaws – from then and has raised over $2 billion in fresh funding from marquee investors like Japan’s Softbank and Chinese internet firm Tencent.
Saikia is alleged to have received kickbacks from a vendor who supplied recruits to Ola. “This must have been going on for at least two years, hundreds of new hires every year. I estimate annual monies earned through recruitment alone to be at least Rs 5-6 crore. And this is just the fee paid to an outfit created for the purpose,” said the second source.
The company, which is raising nearly $2 billion (of which $1.1 billion has already been raised) at a post-money valuation of $7 billion, has nearly 6,000 employees now.
Hirings involving as many as 1,000 Ola employees are being investigated now and could be reviewed, the second source said.
According to Ola filings, the company clocked Rs 758 crore in revenues for the year ended March 2016 and lost Rs 2,313 crore in the same period. Though numbers are not available for the last financial year or the first three quarters of this one, Ola is widely seen as winning against archrival Uber in India.
When FactorDaily called him, Saikia denied any knowledge of the Ola investigation. “I’m not familiar with that actually. I haven’t been notified of anything of those kinds,” he said.
When asked whether he has left Ola, he directed us to the company’s public relations team. “The recruiting head signs the recruitment contracts. I don’t sign any of that actually. I haven’t been notified of anything that you have just mentioned,” he said when asked if he approved the recruitments made through its vendors.
Saikia had worked with data analytics firm FICO before Ola hired him and at financial services company American Express before that, according to his LinkedIn page.
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Disclosure: FactorDaily is owned by SourceCode Media, which counts Accel Partners, Blume Ventures and Vijay Shekhar Sharma among its investors. Accel Partners is an early investor in Flipkart. Vijay Shekhar Sharma is the founder of Paytm. None of FactorDaily’s investors have any influence on its reporting about India’s technology and startup ecosystem.